The figure is up from last year’s estimate of $US246.9 billion ($340.9 billion) and has jumped from $US205.9 billion ($284.3 billion) in 2012 when the firm published the first of its global extreme event risk reports.

For a 1-in 250-year experience the global insured loss estimate has increased to $US341.9 billion ($472 billion) from $US325.3 billion ($449.1 billion) in last year’s calculation.

“Companies with global exposures and an expanding global reach should prepare for the possibility that future catastrophes will produce losses exceeding any historical amounts,” AIR Worldwide says.

The insured average annual loss is estimated at about $US85.7 billion ($118.3 billion), based on regions and perils modelled by AIR, as well as databases of property values for more than 100 countries.

The long-term estimates come amid an active year for catastrophes, including recent wildfires in California, US hurricanes and typhoons in Asia.

“After a decade of below-average losses, apart from 2011 and 2017, 2018 will reinforce the fact that preparing for large losses before they occur is critical to continued solvency and resilience,” AIR Worldwide EVP Rob Newbold said.

The Oceania region has a potential 1-in-100-year loss estimate of $US25 billion ($34.5 billion), while for North America the figure is $US223.7 billion ($308.8 billion).

The report highlights the protection gap between economic and insured losses, particularly in some regions hard hit by catastrophes this year.

In Asia the potential insured loss for a 1-in-100-year experience is $US64.2 billion ($88.6 billion), while the insurable loss is $US444.3 billion ($613.4 billion).

Catastrophes that affected the region this year included Typhoon Mangkhut which hit the Philippines, mainland China, Hong Kong and Macau, while the impact of an earthquake and tsunami on Indonesia also showed the protection gap.

“In the public sector, governments are recognising the importance of moving from reactive to proactive risk management, especially in countries where the risk is well known and a risk transfer system is not well established.”

AIR says severe storm and tropical cyclones contributed about a third to the estimated insured average annual losses, with earthquake, crop losses, flood, wildfire and terrorism accounting for the remainder.